Swiss Re: Societal change and the £1.6 trillion growth opportunity
The prolonged uncertainty and isolation brought on by the pandemic has taken its toll on us all over the past 18 months. But one segment has felt the effects particularly hard: women in the workforce.
Recent data from the Office for National Statistics (ONS) found that, since the UK was first plunged into lockdown, women were more likely to be furloughed and spend more of their time on unpaid childcare.
In recent years, as a society we have made huge strides to address gender equality by making our global economy more gender inclusive. In the UK today, for example, more than half (61%) of women are a dual earner in their household.
But the Covid-19 crisis, from which we're still emerging, has unfortunately set some of these achievements back by several years and, in some countries, generations.
Tackling this challenge is in our best interest to nurture economic growth and build societal resilience. For the insurance industry however, it also demonstrates a need to invest in understanding – and incorporating – the role of women as key decision makers when it comes to insurance purchase.
Why does gender matter when it comes to insurance?
One could argue that insurance products, features and sales methods were all originally designed for men - traditionally seen as the key decision makers of the family. But while that concept has evolved – the products and sales techniques of insurance have seemingly not.
For example, even the safety procedures that insurance premiums are factored around exhibit a male bias. Both crash test dummies and personal protective equipment (PPE) are designed with the average male body in mind. This is despite the disparity in average size between men and women, and the impact that more tailored procedures could have on both women’s safety and financial situations.
Life insurance is another such example. Designed to protect an income if one member of the family was to pass away, it typically fails to capture the enormous responsibility and value involved in unpaid work, such as that undertaken by stay-at-home parents or other full-time caregivers – roles traditionally held by the matriarch.
Our research has also shown notable differences in insurance buying behaviour between women and men, especially when it comes to product focus and the purchasing decision funnel. For instance, women tend to put additional value on recommendations by trusted sources in order to discover, evaluate and ultimately purchase new insurance products. This means that insurers could be helping women to better assess the benefits of products through referrals and community consultation.
As for products, we can see that women are generally more focused on healthcare, especially for their children. At the same time they are less prone to buy life insurance, which could make them less prepared for their own mortality risk.
Couple this with the fact that women are typically more loss averse than men, preferring safer investments at the expense of greater returns, this can mean that women are likely to be less prepared for the longevity risk without insurance products that cater to their specific needs.
A growing funding gap among female entrepreneurs
Over the years, women entrepreneurs have become an increasingly important pillar for economic stability. In Europe, for example, women represent 30% of start-up entrepreneurs.
Yet, despite producing higher revenue per pound invested, access to capital remains an ongoing challenge for a lot of women. Insurance could help many female business owners to de-risk their businesses and expand their funding capabilities, while also securing risk coverage for company operations and employees.
A four-step approach to driving progress
We believe there are four major steps we should be taking as an industry to start driving change:
Changing our language: a recent study from Fidelity Investments found that more than half (56%) of women don’t feel comfortable discussing their finances. There is an opportunity, therefore, to transform the way we talk about insurance, demystify technicalities and discuss the aspects that women value the most in industry literature.
Adapting distribution: by considering specialised distribution channels, we could help facilitate greater access to insurance for women as a complement to other forms of capital.
Designing tailored products for women: we should be seeking to integrate attributes women value into insurance products with a particular focus on the risk management needs.
Attracting more female insurance talent: gender inclusion is both about social impact and business sense, so there is opportunity to build a competitive advantage for the consumer market of the future by bringing to the industry female talent, whom can better understand and cater to the needs of female customers.
Solving these challenges will take time and significant research, but the upside of building an offering that more proactively addresses the insurance and risk needs of women, while also making it more accessible for them as buyers, is tremendous. By 2029, a more gender-inclusive world could mean an additional GBP 1.6 trillion of insurance spend for our industry. More importantly, it would create a global workforce that is more vibrant, more resilient and more inclusive.
As an industry, we should continue to act to make our workplaces more inclusive and diverse. However, if we can create an insurance environment that truly addresses the ever-evolving needs of women, we can bring transformative change to society.
 Kowalewska and Vitali (2019) based on data from the Luxemburg Income Study (LIS)
Additional information: Women as insurance decision-makers | Swiss Re